Friday, November 28, 2008

When it applies to medical & dental plans that are not really insurance.

We have covered this topic before, but it bears repeating. Unemployment is high and going higher. Money is tight. Folks are looking for ways to save money.

Discount medical & dental plans are not the answer.

What are the pluses to discount plans?

There are no deductibles. Of course not. Insurance has deductibles, this is not insurance.

The benefits are unlimited. Of course not. Insurance has limits, this is not insurance.

No underwriting. Anyone can get the plan regardless of health.

Relatively low cost. Some plans are "free" while others come with fees (not premiums) as high as $200 per month.

The discounts, when applied, can be significant. Note the operative word is "can". What is promised usually is not the same as what is delivered. Therein lies the rub.

So what are the negatives?

Almost too many to mention but here are a few.

The card usually is not as widely accepted as promised.

The discounts are available WHEN you have the ability to pay. If you cannot pay the bill, the discount evaporates.

There is no limit to your liability. A $200,000 bill is still a $200,000 bill with all the liability falling on you. A discount plan can quickly bankrupt you.

There is no oversight. Discount plans are not (for the most part) regulated by state or federal insurance laws . . . because they are not insurance. If you are not satisfied with the plan, you have almost no place to address your complaint.

There is no oversight. If a provider refuses to accept the card, or seeks to offset the discount by scheduling unnecessary services (as happens all too often) there is no one to certify the services are needed. Since you pay the bill, and not a carrier, the marketing arm that issues the card really doesn't care if you pay for things that are not needed.

The discounts are almost always illusory. Many times you can get a better price by simply asking providers to work with you vs. using a card. Almost all the Rx discount cards are worthless. Smart shopping can almost always result in a lower price.

When it applies to medical & dental plans that are not really insurance.

We have covered this topic before, but it bears repeating. Unemployment is high and going higher. Money is tight. Folks are looking for ways to save money.

Discount medical & dental plans are not the answer.

What are the pluses to discount plans?

There are no deductibles. Of course not. Insurance has deductibles, this is not insurance.

The benefits are unlimited. Of course not. Insurance has limits, this is not insurance.

No underwriting. Anyone can get the plan regardless of health.

Relatively low cost. Some plans are "free" while others come with fees (not premiums) as high as $200 per month.

The discounts, when applied, can be significant. Note the operative word is "can". What is promised usually is not the same as what is delivered. Therein lies the rub.

So what are the negatives?

Almost too many to mention but here are a few.

The card usually is not as widely accepted as promised.

The discounts are available WHEN you have the ability to pay. If you cannot pay the bill, the discount evaporates.

There is no limit to your liability. A $200,000 bill is still a $200,000 bill with all the liability falling on you. A discount plan can quickly bankrupt you.

There is no oversight. Discount plans are not (for the most part) regulated by state or federal insurance laws . . . because they are not insurance. If you are not satisfied with the plan, you have almost no place to address your complaint.

There is no oversight. If a provider refuses to accept the card, or seeks to offset the discount by scheduling unnecessary services (as happens all too often) there is no one to certify the services are needed. Since you pay the bill, and not a carrier, the marketing arm that issues the card really doesn't care if you pay for things that are not needed.

The discounts are almost always illusory. Many times you can get a better price by simply asking providers to work with you vs. using a card. Almost all the Rx discount cards are worthless. Smart shopping can almost always result in a lower price.